CHAPTER 17CHAPTER 17

Criminal Law

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INTRODUCTIONINTRODUCTION

This chapter examines what a crime is, what the basics of criminal procedure are, and the major constitutional issues involving criminal procedure. The chapter also introduces other federal criminal statutes involving such areas as white-collar crime, computer crime, and environmental laws.

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DEFINITION OF A CRIME

DEFINITION OF A CRIME

Crime is an offense against the general public at large.

The Criminal Act – actus rea The State of Mind – mens rea

– Strict liability statues are generally disfavored.

– Mens Rea: negligence, recklessness and intention.

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CRIMINAL VS. CIVIL LIABILITY

CRIMINAL VS. CIVIL LIABILITY

Not mutually exclusive; criminal law protects society as a whole by punishing the criminal, while civil law monetarily compensates the victim.

Negligence Per Se – violation of a criminal statue that causes civil injury.

Burden of Proof– Civil Trial – preponderance– Criminal Trial – beyond a reasonable doubt

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SOURCES OF CRIMINAL LAW

SOURCES OF CRIMINAL LAW

Types of Crimes – felony is a crime punishable by over one year in prison and/or a fine, or death; a misdemeanor is punishable by one year or less in jail and/or a fine.

Ex Post Facto Clause – a person can be convicted of a crime only if the person’s actions constituted a crime at the time they occurred.

The Model Penal Code – a set of criminal law statues that were proposed by the National Conference of Commission of Uniform State Laws for adoption by the U.S..

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THE FEDERAL SENTENCING GUIDELINES

THE FEDERAL SENTENCING GUIDELINES

It gives judges less discretion. Federal Sentencing Guidelines for Individuals – parole

abolished in 1984. Federal Sentencing Guidelines for Organizations –

added in 1991.– Punishment under the guidelines.– Misgivings about the guidelines.– Guidelines should be updated for cyber crimes and

cyber terrorism.– Letting employees take the rap.

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CRIMINAL PROCEDURE CRIMINAL PROCEDURE Arrest – put in police custody. Preliminary hearing to demonstrate probable cause. Arraignment – the accused is asked to state his or her response to

the charges: guilty, not guilty, or nolo contendere. Plea Bargaining – a reduced charge and sentence for a guilty plea.

– Use Immunity – cannot use testimony against the witness in any way.– Transactional Immunity – no criminal charges on any matter discussed in the

witness’s testimony.– Consent Decree – court order based on an agreement by the defendant

corporation to take steps to remedy the problem that led to the criminal charges.

• Trial

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FOURTH AMENDMENT PROTECTIONS

FOURTH AMENDMENT PROTECTIONS

The Arrest Warrant Requirement – probable cause required for arrest or for a seizure.

Searches and Seizures and Reasonable Expectations of Privacy – police need a warrant because of very strong privacy expectations in the home.– Warrantless searches – most police searches are of this type

because the search is either not unreasonable under the circumstance, or

– Search falls within the six established exceptions to the search warrant requirement.

– Distinction between visual and tactile search [Bond v. U.S. (2000)].

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Suspicionless and Adminstrative Searches and Seizures.– Thermal Imaging scanners [U.S. v. Kyllo (2000)].– Cordless, Cellular Phones and Email.

Obtaining a search warrant – three requirements: probable cause basis, supported by oath or affirmation, and especially detailed as to what is to be searched and seized.

FOURTH AMENDMENT PROTECTIONS

FOURTH AMENDMENT PROTECTIONS

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THE EXCLUSIONARY RULE THE EXCLUSIONARY RULE

The fruit of the poisonous tree, excludes evidence seized in violation of the Fourth or Fifth Amendments. Exceptions:

“Good faith” “Inevitable discovery”

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FIFTH AMENDMENT PROTECTIONS

FIFTH AMENDMENT PROTECTIONS

Self-Incrimination – applies to criminal cases.– Business records and papers and the Collective

Entity Doctrine.– Foreign prosecutions

Double jeopardy – cannot be tried to a verdict twice for the same crime.– Civil and criminal prosecutions by the

government. Due Process and voluntary confessions.

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SELF-INCRIMINATIONSELF-INCRIMINATIONCase 17.2 Synopsis. United States v. Hubbell (US, 2000).

During an independent counsel investigation of possible violations of federal law by former president Bill Clinton, his wife Hillary, and their Arkansas law partners in connection with the Whitewater Development Corporation, Webster Hubbell entered into a plea bargain. Hubbell pled guilty to charges of mail fraud and tax evasion, and promised to provide full information relating to the Whitewater investigation. The independent counsel later served Hubbell with a subpoena for eleven categories of Whitewater documents. Hubbell attempted to invoke the Fifth Amendment privilege against self-incrimination, but was required to provide documents and records with the assurance that he would be granted immunity “to the extent allowed by law.” CONTINUED

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Case 17.2 Synopsis. (Cont’d)

The contents of the documents provided the basis for a second grand jury prosecution of Hubbell in which he was indicted on ten counts of tax-related crimes and mail and wire fraud. Hubbell challenged the indictment on the grounds that it was based on the documents produced by Hubbell under a claim of immunity, in violation of his privilege against self-incrimination. ISSUE: Does the Fifth Amendment privilege against self-incrimination protect a witness from having to testify about the existence and sources of potentially incriminating information? HELD: YES. Indictment was dismissed.

SELF-INCRIMINATIONSELF-INCRIMINATION

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SIXTH AMENDMENT PROTECTIONS

SIXTH AMENDMENT PROTECTIONS

Assistance of Counsel – a right in most criminal prosecutions.

Jury Trial – allowed in most criminal trials.

Other Procedural Rights – speedy trial, right to confront and to cross-examine witnesses.

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NON-CONSTITUTIONAL PROTECTIONS

NON-CONSTITUTIONAL PROTECTIONS

Prosecutors must provide the defendant with all the information requested.

Attorney-Client Privilege – protects the relationship that has been established.

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LIABILITY FOR CRIMINAL ACTIONS

LIABILITY FOR CRIMINAL ACTIONS

Individual Liability – criminal act against, or for, a corporation.

Vicarious Liability – managers liable for employee’s acts.– Responsible Corporate Officer Doctrine [U.S. v. Park

(1975)].– Impossibility defense to strict liability.

Corporate Liability – vicariously liable if employees’ acts are within the scope of their duty.

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WHITE-COLLAR CRIME WHITE-COLLAR CRIME

A violation by a corporation or one of its managers. Types

– Larceny– Embezzlement– Fraud– Bribes

Crime by a Corporation – such as consumer fraud, securities fraud, tax evasion. Pollution, price fixing, misappropriation of trade secrets, and violations of copyrights, patents, and trademarks.

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RACKETEER INFLUENCED AND CORRUPT

ORGANIZATIONS ACT

RACKETEER INFLUENCED AND CORRUPT

ORGANIZATIONS ACT RICO prohibits:

– Investing in any enterprise of income derived from racketeering

– Acquisition of an Interest in an enterprise through a pattern of racketeering activity.

– Participation in an enterprise through a pattern of racketeering activity involving at least two related predicate acts, in a ten year period.

– Conspiracy to engage in any of these activities.

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RICORICO RICO Requirements – broadly defined. Use of RICO – partially effective against

insider trading. Penalties under RICO:

– Criminal: fines and imprisonment up to 20 years.– Civil: individuals can recover treble damages and attorney’s

fees.

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THE WIRE AND MAIL FRAUD ACTS AND THE FALSE STATEMENTS AND

CLAIMS ACTS 

THE WIRE AND MAIL FRAUD ACTS AND THE FALSE STATEMENTS AND

CLAIMS ACTS 

Wire and Mail Fraud:– Scheme intended to defraud or obtain

money/property by fraudulent means.– Use of mail or interstate phone lines in

furtherance of the scheme. False Statements Act (1994) False Claims Act – used against defense

contractors and health care fraud.

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COMPUTER CRIME COMPUTER CRIME

Computer Fraud – use of computer to steal company or government money.– Computer Fraud and Abuse Act (CFAA).– Computer Piracy – theft or misuse of software.– Computer Viruses

View From Cyberspace: Fighting Cyber-Crime

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COMPUTER FRAUD AND ABUSE ACT (CFAA)

COMPUTER FRAUD AND ABUSE ACT (CFAA)

Case 17.3 Synopsis. Shurgard Storage v. Safeguard Self Storage, (W.D.Wash. 2000).

Shurgard sued a competitor, Safeguard, for allegedly embarking on a “systematic” scheme to hire away key employees for the purpose of obtaining trade secrets. Shurgard claimed Leland, its employee, used Shurgard’s computers to access various trade secrets and proprietary information belonging to Shurgard, and to send e-mails containing the information to Safeguard. The emails were sent to Safeguard while Leland was employed at Shurgard. at the time he sent the e-mails. CONTINUED

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Case 17.3 Synopsis. (Cont’d).

Shurgard alleged misappropriation of trade secrets, conversion, unfair competition, tortious interference with a business expectancy, and violations of the Computer Fraud and Abuse Act. Safeguard moved to dismiss the CFAA claims. ISSUE: Does the CFAA apply to an employee’s use of his employer’s computer to e-mail misappropriated trade secrets to a competitor? HELD: Motion to Dismiss was DENIED. . . . [T]he CFAA was intended to control interstate computer crime, and since the advent of the Internet, almost all computer use has become interstate in nature.

COMPUTER FRAUD AND ABUSE ACT (CFAA)

COMPUTER FRAUD AND ABUSE ACT (CFAA)

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CRIMES INVOLVING INTELLECTUAL

PROPERTY

CRIMES INVOLVING INTELLECTUAL

PROPERTY The Copyright Act – criminalizes the willful infringement

of copyrights for commercial gain. No Electronic Theft Act – permits federal prosecution of

willful copyright infringement, even if the infringer has not acted for his or her commercial advantage or private financial gain, if the infringer reproduced or distributed one or more copies of a copyrighted work with a retail value in excess of $1000.

Economic Espionage Act of 1996 – theft of trade secrets a federal crime.

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TAX AND ANTITRUST LAWS

TAX AND ANTITRUST LAWS

The Sherman Act– Penalties– Prosecution

Securities Law Violations– Federal Securities Laws

• 1933 Act• 1934 Act

Blue Sky Laws

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BLUE SKY LAWS BLUE SKY LAWS Case 17.4 Synopsis. Mueller v. Sullivan (1998).

Mueller controlled Farm Loan Services, an auction house for the sale of securities. He was charged with violating Wisconsin’s version of the Uniform Securities Act, which provides that the willful omission of material facts in connection with the purchase of sale of securities is a crime. The trial judge instructed the jury that Mueller could be convicted under the act if the prosecution proved that he knew that the investors were not being told relevant information that was objectively material. Mueller and Stopple were subsequently convicted. CONTINUED

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BLUE SKY LAWSBLUE SKY LAWSCase 17.4 Synopsis. (Cont’d)

Mueller challenged his conviction, claiming that the Due Process Clause of the Fourteenth Amendment required a more stringent showing of mental state, specifically, the intent to deceive, required in cases under Section 10(b) of the Securities Exchange Act of 1934 (1934 Act), on which many sections of the Uniform Securities Act were modeled. ISSUE: Does the Due Process Clause permit conviction for violation of state securities laws when the defendants knew what they were doing, but did not know that it was illegal? HELD: YES.

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OTHER FEDERAL CRIMINAL REGULATORY

LAWS

OTHER FEDERAL CRIMINAL REGULATORY

LAWS The Environmental Laws– The Clean Water Act– The Resource Conservation and Recovery Act

The Occupational Safety and Health Act– OSHA Requirements – safe work environment– Penalties under OSHA – civil and criminal– State Law Prosecutions of Workplace Safety

Hazards The Foreign Corrupt Practices Act

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REVIEWREVIEW 1. Discuss the positive and negative aspects of the Federal

Sentencing Guidelines. 2. Explain why a search warrant is not needed for a cellular

telephone conversation. Should a warrant be required for thermal imaging? For email?

3. Does the FBI’s “Carnivore” software that monitors our email

violate our right to privacy? 4. What creative sentencing and punishment should be imposed for

computer crimes and cyberterrorists?